The disclosed subject matter relates to methods and systems to shift at least a portion of an investment risk in a wind power generation project.
There exist at least two types of investors, Debt Investors and Equity Investors. An Equity Investor, as opposed to a Debt Investor, will generally bear the economic risk of a project or investment. In this regard, two premises of corporate finance are applicable to the disclosed subject matter: investors will typically try to diminish any risk that they are not in business to take; and different parties view the same risks differently, such that a particular risk may be material to one party, but not material to another. As such, the amount of investment that an Equity Investor can make in a project may be limited by his/her ability to calculate and bear the risk of the project. This may be particularly true with complex investments, such as those connected with wind power generation.
Investing in wind power generation may be difficult because of, for example: i) the nature of the variability of wind ii) the equipment risk involved with wind turbine generators, iii) other operational risk, and iv) the nature of the current tax regime in the United States with production tax credits under 26 U.S.C. §45.For example, under 26 U.S.C. §45, which governs the tax credits available for investors in renewable energy, in order to qualify for certain tax credits, the investor(s) must be the owner(s) of the facility, and may be required to bear the majority of the risks and benefits of ownership.
Because of these and other reasons, prior to the disclosed subject matter, an investor would need to accumulate the requisite familiarity with many facets of wind power generation in order to make appropriate investment decisions. This can result in fewer investors, as well as smaller investment amounts, in wind power generation.